NEW PROPOSED BILLS THAT WILL AFFECT YOUR BUSINESS & BOTTOM LINE THIS YEAR

A series of bills mandating expanded healthcare coverage could significantly increase costs for Connecticut small businesses and their employees. Rising healthcare costs remain one of the main concerns for Connecticut employers, particularly small businesses, which are the majority of businesses in the Windham Region. “With each new requirement to cover or expand additional services or devices, the cost of health insurance increases, especially to small employers, who are not required to offer health insurance but choose to do so,” Rakebrand, a CBIA spokesperson told the Insurance & Real Estate Committee.

CBIA, the Windham Region Chamber and many other business organizations across the state urged committee members to do a cost-benefit analysis of proposed healthcare mandates as part of their due diligence process, rejecting mandates where costs outweigh benefits. Mandates outlined in SB 15, SB 33, HB 5211, HB 5213, HB 5518, and HB 5724 would increase healthcare costs for small businesses and their employees. Many small businesses with less than 50 employees choose to provide health benefits to workers, although they are not required to do so. Small businesses not only need to compete for talent by offering competitive benefits, they also understand the value of a healthy workforce. However, federal and state mandates make it increasingly difficult for small businesses and their employees to afford insurance.

The Windham Region Chamber asks our legislative leaders, as we have done in the past, to strongly consider weighing the value of the proposed benefit against the cost of the measure before legislating additional healthcare mandates. We are also opposed to any proposed bills that will require changes in processing that insurance carriers must complete that would incur additional costs which would be passed on to employers and their employees.

Mandate reviews should include:

The portion of the population that would use the benefit

Whether the benefit is currently available and, if so, the extent of availability

The level of public demand for the benefit

The impact it would have on the availability of other benefits

The cost to carriers and employers

The mandate’s overall social implication

$15 Minimum Wage

A $15 hourly minimum wage is a top legislative priorities for House and Senate Democrats and the Governor this General Assembly session. While well-intentioned, the initiatives are a combined hit to businesses and employees. Workplace mandates contribute to Connecticut’s ranking as one of the 10 most costliest states in the country to run a business. For instance, a $15 hourly minimum wage will cost employers more in payroll and will result in fewer hours and opportunities for workers. The state’s current minimum wage is $10.10 a hour, well above the federal minimum of $7.25, and one of the highest in the country.

A study last year by the state Office of Fiscal Analysis showed that a $15 minimum wage will cost taxpayers at least $50 million a year through increased compensation and contract costs to state agencies and municipalities. CBIA’s Eric Gjede said if lawmakers do push the minimum wage to $15, it should done over six to seven years to lessen the impact on business. This will also hurt hurt critical workforce development efforts. If a kid in Hartford can make $15 working at a Dunkin’ Donuts around the corner, then he or she won’t make the trip to Middletown to work in a facility for a career—let alone to manufacturers less centrally located.

Paid FMLA

Another priority for the House and Senate Democrats and the Governor is paid family leave. The two paid FMLA bills introduced this year—SB 1 and HB 5033—largely mirror legislation that failed in last year’s General Assembly session. The new legislation deducts up to 0.5% from the paychecks of employees at all private sector companies to fund a state-run paid FMLA program—even if an employer already offers leave or has a short term disability policy. The program then provides up to three months of paid leave annually for eligible applicants at 100% of pay, capped at $1,000 per week. The eligibility requirements outlined in both bills are extremely broad: anyone who earned at least $2,325 in any quarter over the previous five quarters from one or more employers is eligible for benefits, regardless of whether they are employed when filing. The leave mandates, which do not apply to public sector workers, define a family member as not just a blood relative, such as a grandchild or sibling, but also someone whose “close association with the employee is the equivalent of a family member.”

OFA calculated the FMLA proposals lawmakers rejected last year would cost taxpayers over $13 million in start-up costs and almost $19 million annually to fund the 120 new state employees needed to run the program.

Small Business Impact

Among the arguments against paid leave is that many businesses, especially smaller ones, simply can’t afford to leave a position vacant for up to 12 weeks. And employers must determine how to run their companies when employees are out on leave. Employers will still be on the hook to pay for non-wage benefits for all these employees who are absent from the workforce for up to three months every single year.

Economic Warning

Rep. Jason Perillo (R-Shelton) said the mandatory payroll deduction needed to fund the paid FMLA program amounted to another tax. “It’s just another burden on middle-class families and people who are working hard every day,” he said. A spokeswoman for Gov. Ned Lamont said he supports raising the minimum hourly wage and paid FMLA. “He looks forward to working together with the legislature on the specifics to make sure they work best for the people and businesses of Connecticut,” the spokesperson said. Fasano warned against implementing policies that would further slow the state’s economy. “We need to be very careful not to pass policies which could obliterate our current economic momentum,” he said. “An onslaught of economic wrecking ball legislation would put Connecticut into a free fall.”

A legislative committee this week approved broad new mandates on Connecticut employers, including paid family and medical leave and a massive expansion of the state’s paid sick leave statute. The Labor and Public Employees Committee also unanimously passed long-overdue reforms to the state’s unemployment compensation system, although that bill faces significant challenges as it moves to […]

Connecticut employers will save more than $100 million in workers’ compensation costs next fiscal year due to a reduction in assessment rates for the state’s Second Injury Fund. State Treasurer Denise Nappier this week announced a half-point drop in rates. “The rates for insurance companies will decrease from 2.75% to 2.25% for insured employers,” Nappier […]

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